In a release for its November 2015 estimates on construction spending, the U.S. Census Bureau announced that it had restated each of its monthly estimates since January 2005. The announcement had been included in a footnote.
“In the November 2015 press release, monthly and annual estimates for private residential, total private, total residential and total construction spending for January 2005 through October 2015 have been revised to correct a processing error in the tabulation of data on private residential improvement spending,” the footnote stated.
The spending figures were recalculated after changing the weighting for residential improvements, such as remodeling, additions and replacements of water heaters and furnaces. The construction spending data is one field that economists use to determine the health of the housing industry and the country’s GDP.
“The revisions mean that remodeling spending did not take the deep dive in 2014 that the previous estimates suggested,” National Association of Home Builders (NAHB) Chief Economist David Crowe said. “The revisions re-confirm NAHB’s belief all along that remodeling has been a staple behind the whole housing industry.”
The updated data could show that not just the housing industry, but the overall economy was healthier than previously reported.
According to a report from The Fiscal Times: “The average size of the corrections over the 10-year period in question has been 1.2 percent of the seasonally adjusted total value of construction ‘put in place.’ The 1.2 percent figure is in absolute terms, but the revisions were both positive and negative at various times, and ranged from practically 0 to 4.6 percent. While the size of the revisions has waxed and waned somewhat over the years, the data shows a clear trend toward larger misstatements in the most recent data. In 2014 and 2015, all of the original reports understated the ‘Total Construction’ value by a factor of 3.1 percent, on average. In the first 10 months of 2015, that figure rose to 3.5 percent.”